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Weather Cools Down Home Starts a Bit in February

The rate of new home construction in February fell 4% below January's upwardly revised rate of 1.932 million, but was 13.1% above the level recorded a year earlier, the Commerce Department reported last Tuesday.

“Builders continued to adjust their new production to a more sustainable level after the surge of late 2003,” said NAHB President Bobby Rayburn. “But builders remain very confident about the market, and we expect to maintain a very healthy pace through the coming months.”

Despite some weather-related problems last month, NAHB Chief Economist David Seiders, said that market conditions remained healthy. “The interest rate structure is even more favorable than earlier in the year, and with house price performance remaining solid and continued increases in household formations, we expect housing to remain strong,” he said.

Seiders even suggested the possibility that housing starts this year “could equal or surpass the excellent performance of 2003, if interest rates are well-behaved as this year progresses.”

Single-family housing starts declined 4.1% in February to a rate of 1.489 million, which was 13.5% higher than a year earlier.

Multifamily starts decreased 3.4% to a seasonally adjusted rate of 366,000 units, 11.6% higher than February of 2003.

Residential construction fell 10.6% in the South and 7.5% in the West. It climbed 25.3% in the Northeast and 7.1% in the Midwest.

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